Corporate & Securities Law

As the American population continues to age, advisers need to be on the lookout for clients with signs of Alzheimer?s disease, dementia or other cognitive diseases.  Not only does this protect clients from making or agreeing to financial decisions that they do not fully comprehend, but also it protects advisers from liability and lawsuits.

For advisers, the signs dementia or other cognitive diseases are subtle and difficult to perceive even for the most sensitive adviser, as advisers historically have not been trained to deal with needs of those suffering from cognitive degeneration.  However, with the aging of the American population advisers educate themselves and be prepared to take steps to protect everyone involved as soon as the initial symptoms of a cognitive disease appear.

Advisers are in a unique position to spot these diseases on the front end and prevent financial ruin before it occurs.  Signs that a client may be beginning to suffer from dementia or Alzheimer?s include: (I) signs of dramatic personality change, such as going from trusting to paranoid; (ii) asking the same question multiple times in a row; (iii) inability to understand changes in the portfolio; (iv) inability to recall past conversations; (v) difficulty in comprehending simple changes in a portfolio; or (vi) forgetting current events or family members.

Interestingly, many early stage dementia patients may not overtly show signs of the disease as they continue to live life as normal and may cover the signs of the disease with humor or questions.

When a client begins to truly suffer, however, it is crucial that an adviser takes immediate action.  This includes notifying the family or brining in a third person, such as another relative, attorney, or guardian.  By having a third party put on notice of the degeneration and brought into the financial decision making process.  While advisers must still maintain the same confidentiality and professional obligations to the client, it is important that the adviser get formal permission to discuss the client?s portfolio with a third party.  Some advisers now routinely get this permission on a routine basis as part of the new client intake process.

Being aware of dementia and other cognitive diseases which the elderly can suffer from can protect not only the client, but the adviser as well.

If you are an adviser and have questions about how to best handle a client suffering from dementia, contact Jim Eccleston at the Eccleston Law Offices at 312-332-0000 to discuss.